The Explosive Growth of Ireland - Report Example

INTRODUCTION Ireland has been called the Celtic Tiger. This animal symbolizes the economy that has changed from first gear (slow economy) to fourth gear (fast economy) when driving a car. The following paragraph explains why Ireland is correctly called the beautiful name of CELTIC TIGER. BODY Ireland’s rapid economic growth period between 1990s and 2001 or 2002 The Repubic of Ireland was called the Celtic Tiger (depicted as a green striped tiger) in the economic writings of the Irish economist, David McWillliams and the 1994 Morgan Stanley Report. The Celtic Tiger image was due to Ireland’s strong economic growth between the period 1990s and 2001 or 2002. (McAleese, D, 2004) The Celtic tiger period of Ireland simply means that there was a strong economic miracle in Ireland that increased the earning power as well as the spending power of the Irish people. The East Asian country tigers were South Korea, Singapore, Hongkong, Taiwan and other East Asian Countries. The East Asian economic boom occurred between 1980s to the 1990s. During the economic tiger years, the Irish economy had increased by less than an average of five and a half percent per year. This resulted to the Irish living standards reaching the high living standards of Some European Countries. The economic slowdon in the year 2001 had cut the economic boom of Ireland until 2003 where the Celtic tiger again woke up. According to Dr. Dermot McAleese in this article Markets Created a Pot of Gold in Ireland by Benjamin Powell, Ireland’s Celtic Tiger economy was because of many factors. One major factor was its low corporate taxation rate of between ten to twelve percent. This attracted companies from the United States and the European Union to put up branches or even their headquarters in Ireland. Another factor that helped wake up the Celtic Tiger economy was the subidy transfer payments from the highly developed European Union member states like France and Germany. Another major factor that helped awaken the Celtic Tiger was the big government thrust to use some of the transfer payments to give free education to its citizens. In fact, University tuition fee is free. Some of the government funds were used to put up the infrastructures like more usable roads and bridges to trigger the economic upturn. Before the Celtic Tiger economy of Ireland, It had a low economy where low wages are a common trademark. This low wage was the spark that woke up the Celtic Tiger. The multinational companies decided to put up branches in Ireland because they could save on the low wages of the Irish labour force as compared to the higher average daily wage of the workers in the United States and European Union member states. Another major factor that helped it wake up was its membership in the European Union in 1973. The principle of the European Union was to create one European economic market where each of the European Union member states could buy and sell goods and services freely with other member states. They created the European Dollar as an alternative currency to the United States Dollar. Ireland’s trading partner was mostly with the United Kingdom before its acceptance into the European Union. In fact, Irelands entry into the European Union market place has successfully enticed multinational companies like Intel, Dell and Microsoft and others to set up operations in Ireland’s welcoming arms. Another factor that has encouraged big foreign companies to put an office in Ireland was its favourable time zone difference. This means that the Irish employees were working while their United States counterparts were sleeping and likewise the American workers were working while the Irish employees were asleep. Politically, government of Ireland did not meddle or even had little intervention with the business transactions the Irish companies had with their international business contacts. Another factor that has helped the Irish Celtic Tiger to walk with its head up is the political stability as a result of the Good Friday Agreement. This unique agreement created the much needed stable operating business environment. The openning of its International Financial Services Centre in Dublin, Ireland gave rise to more than fourteen thousand jobs in the accounting, legal and financial management sectors. The economy was spurred by Finance Minister Charlie McCreevy’s government policy from 1994 to 2004 of implementation low taxes and the control of government debt during the Celtic Tiger years. Charlie McCreevy finally left his finance minister post in 2004 to work in the European Union. Charlie McCreevy brings his Irish financial techniques to this new European Union post where he will now be helping other European Union member states create their own tiger economies. Ireland is often referred as "Celtic Tiger" flying so fast During this Celtic Tiger time, the Irish economy had grown an average of five and a half percent per year. This resulted to the raising of the living standard of the Irish people to keep abreast of the other European Union member states. Ireland's domestic politics and its relation with European Union According to John Loughlin in his The Inroads article The European Union’s influences on Scotland, Wales and Northern Ireland, in 1998 the signing of the Good Friday Agreement in Belfast was a big political event that occurred to finally give peace a chance among the protagonists in Northern Ireland. Another milestone event in 1998 that occurred was the approvals given to both Scotland and Wales to put up their own governments. (Loughlin, J., 2004) The two government branches were the Scottish Parliament and the Welsh National Assembly. During 1974, The Labour government set up a power sharing assembly in Northern Ireland. This adventure, though, failed because of the many strikes conducted by Unionist politicians like Ian Paisley and the violent Loyalist soldiers of the Ulster Defense Association plus other protestant persons. The labour party, in the year 1979, tied to diffuse a growing threat from Welsh and Scottish citizens by giving, in exchange, by conceding some devolution in Edinburgh and Cardiff. This movement was, however, challenged by anti devolutionists stating that each devolution must be approved by a minimum of 40 percent of the qualified voters in a referendum. However, in Scotland, 58 percent voted in favor represented a small 32.9 percent of the electorate. However, a different result in 1998 was not surprising. In 1998, the referendum had shown that the people proudly embraced the idea of entering into the Good Friday Agreement.with Northern Ireland with a big 81.1 percent score. The Republic of Ireland had a voting score of 94.4 percent that was in favor of the entering in the Good Friday Agreement. In Scotland, the people gave a seventy percent approval vote to set up a Parliament in Scotland. In Wales, however, devolution just barely made the grade with a fifty and 3/10 approval. This was a bigger improvement over its 1979 vote. There was rapid political change in Northern Ireland brought about by the IRA hunger strikes at the start of the 1980 decade. The Honorable Prime Minister Margaret Thatcher had a strong stance against the Irish population where she consolidated Sinn Feins support among the nationalist members in Northern Ireland. The Northern Ireland people were, during this time, tired of engagin in wars to further their political interests. The poltical scenario had change in Ireland’s favor when the nonviolent constitutionalists Social Democratic and Laoubr Party started to decline and Sinn Fein had increase his political influence. The Economy of Ireland, during this period, started to wake up or increase its economic activities. This political turnaround occurred because of factors inside the United Kingdom. The Labour Party had metamorphosed in its many years as the opposition party. The Labour Party had been immobilized by many cleavages from the hard left and the moderate cneter and from the sectors that favoured dvolution and the others that disliked devolution. The Labour party was caught between the struggle between the pro Europeans and the Eurosceptics. This political scenario occurred in the context of social and economic crisis because the old smokestack style of capitalism had failed thereby underming the Beveridgian state and the Keynesian economic approach. The Labour government had weakend in the 1970s causing it to fail to tackle its political obstacles. The International Monetary Fund meanwhile forced the Labour government to swallow its pride and to unwillingly implement the compulsory monetary policies of the International Monetary Fund. The International Monetary Fund had to do these drastic measures in order, in the International Monetary Fund’s honest thinking, to get Ireland out of its economic slowness. This triggered the hard left and the trade unions to organize numerous strikes that crippled the economy of Ireland often time called the “winter of discontent”. The Labour party failure to take over the reigns of government had made it very unpopular to the Irish population. This opened the way for Prime Minister Margaret Tatcher to win in the 1980s and the trasformation of the political land in the twenty years of Tory governance. The British scenario had gone to such an extent where the gap between the prosperous Southeast of England and the rest of the United Kingdom had increased and this included the driving away of Scotland and Wales from England. This is due to Prime Minister Tatcher’s style of imposing her neoliberal policies that was against the traditions of Scotland and Wales of egalitarianism and solidarity. The political climate in Ireland in the 1980s started to schange for the better for both Ireland and the entire European continent because of the onset of glabolizational trade of goods and services and increase in new advances in technology and the change from the economic activity from heavy industry to supply of services to clients from around Europe and the wider world marketplace. This globalization occurred between the 1970s and the 1990s. This surprising globalization inspired the European countries to bond together to form the European Union political system in the 1990s. The European dollar was also invented to replace the different currencies that each European Union member state used in its buying and selling of goods and services. The European Union of member states was formed by the political instrument known as the Single European Act where a single market place was created. Other political treaties that put the finishing touches to a new United Europe were the Treaty of Maastricht and the Treaty of Amsterdam and Nice. The Creation of the European Union had a big impact that improved the economy and living standards of all its members including Britian and Ireland. The Labour party under the leader of Margaret’ Thatcher’s replacement, Tony Blair, had change the the party’s political stance to its new pro European policy and instituted reforms based on the political theory of devolution. There was also a complete revamp of the House of Lords, the electoral process, the decentralization of the local democracy and the implementation of the Bill of Rights. Tony Blair signed both the Treaty of Amsterdam and the Social Charter (formerly put on hold by John Major) which strenghtened the workers’ rights. The Government of Prime Minister Tony Blair put importance in pursuing transatlantic partnerships based on devolution. Prime Minister Tony Blair called this political theory Europe of the Regions. The political climate in Scotland showed that Scotland fought for and finally got their own parliament as stated in the Scottish Constitutional Convention. The people from Wales, however, they favored devolution and were less nationalistic therefor paving the way for them to apply for membership in the European Union. The 1998 referendum had shown this was what the majority of the population wanted. Wales was more concerned with its aim to be a powerful European economic region where the Wales called their parliament an assembly. The basic factor that has created the war between Ireland and the England is who governs which piece of land. Some Irish people wanted to separate from the United Kingdom while other Irish people wanted to keep the United Kingdom intact with Ireland. The Good Friday Agreement finally put a stop to the war between England and Northern Ireland. The European Union member states agreed that sovereignty would overlap to other European Union member states. This European Union political system had a very positive impact on Irish citizens. The Irish people finally stoppe their war for independence from the England and accepted membership in the European Union society starting in 1994 during the Conservative government years in Westminster which was helped by the Major government and the Conservative party. John Major was banking on the Unionist votes in the house of Commons and his hope of peace between Ireland and England. The John Major government and the Conservative party were confused by the conflicts over Ireland’s European integration of Northern Ireland. The change in government ( European Union )with the New Labour party and the pro European Union and Pro devolution government policiy.The Good Friday Agreement created the Northern Ireland Assembly and the North South relations and the British – Irish Council. The British – Irish Council (Council of Isles) was formed with the membership of all nations and regions of the islands including the two governments, the devolved parliament and the assemblies in the United Kingdom including the parliament and assemblies in the United Kingdom, the Isle of Man and the Channel Islands. The member states ( including Ireland) have functioned well resulting to the political win of Ian Paisley Democratic Unionists in the Northern ireland Assmbly elections in 2003. Ireland, as a member of the European Union, has been given more political power to govern its territories. Scotland is the most successful beneficiary of the new European Union political system based on the efforts of the Scotland Parliament’s Committee on European and Expertanl Affairs and the Scottish Executive. This political committee is responsible for all European events and incidents. This Committee will act to make the European laws into the Laws of Scotland. Scotland house, Brussels, has under its political belt the Scotland Europe unit which is a subset of Scottish Enterprise and the Scottish Executive’s European Office. This office engages in intelligence work as well as lobby activities. They all will coordinate their activities with the United Kingdom government's Permanent Representation in Brussels. The Scottish Parliament has been instrumental in placing itself in the European map. Edidburgh is the capital with a big diplomatic corps group called consulates. They cater to the needs of overseas visitors entering its borders. There are visitors coming from Scotland to Euripe and to Brussels and other national and regional parliaments. The United Kingdom country known as Wales is very dissimilar to Scotland. The National Assembly of Wales has primarily the purpose of making Wales a strong European region which presently is moving unexpectedly at a turtle’s pace. The European and External Affairs Committee of Wales is not as powerful as the Scottish European and External Affairs Committee. This assembly has no powers to make laws directly. The committee is no also responsible for overseeing the structural funds that also includes the objective one fund which is the highest level of European Union funding for the most deprived regional districts. This assembly, also, does not connect the many committees on European topics. Wales, which one part of the United Kingdom where Ireland is another part, does lesser orientation to Europe since the start of the assembly in 1999. The Tory government of Prime Minister Margaret Thatcher and John Major, the word Europe was banned in the Wales office. The local administrators had developed a strong European orientation to pay the anti –European and Anti-local government stance of the centralized government. The Labour government on its pedestal in Westminster, the Labour dominated Assembly in Cardiff does not need to join because it has a good connection through London. The means that there is feeling in the European air that Wales is backing out slowly from its self confident, outward looking region to economically fight for its share in the bigger European circle. The assembly has been encouraged for the past few years to join actively in the many activities in Europe. The Wales European Center office is located strategically in Brussels. The Assembly of European Regions has been hesitantly joining in the European interregional organizations like the Assembly of European Regions and the Conference of Pripheral Maritime Regions. The Assembly has finally entered and the Wales First Minister Rhodri Morgan has been activily participating in the many activities in the Conference of Peripheral Maritime Regions. But when comparing the assembly with Scotland, the total effort was a little bit dilatory and also inwardworking. However, in Northern Ireland, they have preferred to engage less with European countries because it is very difficult to put into practice the Good Friday Agreement and the stop and start functioning of the Northern Ireland Assembly. The European Union member states actually make big transactions with Northern Ireland Assembly to fullfill the conditions of the contract signed on the Common Agricultural Policy and the Structural Funds. The European Union member states’ affairs have now been buried under the title Committee of the Centre that checks on the works done by the First Minister and the Deputy First Minister who may be a Unionist or a Nationalist.The Committee of the Centre tract sensitive activities of the Prime Minister and Deputy Prime Minister on topics that are beneficial or detrimental to both writers. One topic covered by the committee is the possible funding issue or the IRA arms surrender or demilitarization by the British Government. Ireland must work double time to insure the maintainance of its image as a high quality producer of goods or services needed. The European dimension has been to like the movements of regional government. The nine plannning regions who are mainly task to gather statistical data and have no scarce sources of data relating to historical, political, cultural, or linguistic basis and Appear to only make the central administrators more comfortable in Whitehall. In the North West as well as in the North East, they have transformed to be the framwork of the mobilization process by regional elites, stimulated largely by the possiblity of obtaining money from the European Union member states. The winning election into office of the labour party in 1997 where the devolution program was created together with the Regional Development Agencies that is patterned after the development of agencies in Northern Ireland, Wales and Scotland. The next step is the completion of a full pledged elected regional government in regions where the people have voted yes in a referendum to put up a full pledged regional government. In the year 2003, the government said that the first ever referendum will held in the North East, North West and Yorkshire and Humber regions and other activities have already started. In many advanced regions regional mobilization and thea European government very clearly hopes that the yes votes will have a knock-out effect in the other European regions, because there is lesser enthusiasm for the project. The next likely candidates will be the West Midlands and the South West, and also the East Midlands. A central argument in each case is the familiar one, already used in Scotland and Wales, that these European departments are needed in the new Europe where competitive regionalism is normal. The regions such as the North East and North West regard Scotland and Wales as their competitors and are looking to repeat their success to attract both internal investment and European funding. The political devolution now taking place in the United Kingdom. Together with the institutions that cropped up from the Good Friday Agreement, institute a big sudden break with the prior very highly centralized tendencies of United Kingdom government. They are now very much in the same thinking with the ideas of "new governance" and the remaking of the state to replace the old hierarchical, topdown and uniform model of the Keynesian welfare state of the 1960s and 1970s. This new model, will contrastingly bring bottom-up decentralization identified clearly by variable geometry and asymmetry. The new model has its normal problems to tackle. The Labour Party in Britain is divided between the term "Old Labour," which focuses on the redistribution of wealth from the rich to the poor by centralizing and making similar mechanisms of public administration, and the term "New Labour," that rejects this approach and at the same time accepts the no coming back of the neoliberal reforms that was popular around in the period 1980s, while it seeks to input into them some elements of social equity and justice. In the country found North of the United States called Canada, there has been much debate about what the future of Canada’s federation and also the nature of Canada’s territorial policiies, and also the question about what the representation of various groups such as the First Nations, women and "new Canadians " would be. In the United Kingdom and inside the European Union of member states we can easily find that the key feature of the a new government policy and the country’s new politics is its openness to other nation’s cultures, traditions and laws. The countries are rapidly evolving with no clear goal in sight because the race is still very very vary far away for the human eye to see. Ron Davies said that , he was the architect of Welsh devolution, "Devolution is a process not an event." In fact, many Canadian citizens are proud to have a federal framework that is very flexible so it can easily accommodate the country's many parts. It is also hoped that in the future, Canada's institutional development would also prove to be open-ended. If this is so, The Canadian people do have a great interest in implementing this process on the other side of the Atlantic. John Loughlin is professor of European politics at Cardiff University. He is currently researching U.K. devolution as well advising the U.K. government on international lessons in regional and local governance. His books include Subnational Democracy in the European Union (2001 and 2004) and, with Michael Keating and Kris Deschouwer, Culture, Institutions and Economic Development: A Study of Eight European Regions (2003). European Union’s Contribution to Ireland's Success For one, the European Union is compose of many European States namely, Austria, Germany, Netherlands, Portugal, Ireland, Italy, Greece, Belgium, Hungary, Poland, Cyprus, Czech Republic, Slovakia, Slovenia, Spain, Sweden, Denmark, Estonia, Finland, France, Malta, Latvia, Lithuania, Luxembourg, United Kingdom. Other European countries are still applying for membership into the European Union. The member states are now considered as one solid society. This means that any citizen can visit the other member states in the European Union without any Visa. This increase of movement from one member state to another has increased the number possible clients that a business in one European Union member state can have. The companies in Ireland can now sell its goods or services to prospective clients in France or Spain or its usual trading partner, the United Kingdom, or Germany or Netherlands or Portugal and even Poland. The increase is sales will result to an increase in income. The increase in income will result to more purchasing or spending money. The higher spending money will result to more sales to the department stores and other business establishments. This will in turn increase the number of establishments to fill the sudden increase in spending money. The European Union has also set up its own court of law, which is called the European Court of Justice. This European Court of Justice is different and independent from the normal courts of justice of the European Union member states. CONCLUSION In conclusion, Ireland has grown into a Celtic Tiger because it is one of the three European Union Countries that have very low average wages paid for labor. The added advantage it has over its two other rivals who have low wage rates is that only Ireland has an English speaking population. This low wage plus the low income rates its business have to pay plus the European funding Ireland receives are the factors that has enticed multinational companies to put up their headquarters or branches. The Celtic Tiger has awaken because now that the people of Ireland have enough money to spend, there will be more stores opening up in Ireland to cater to the buying spree of the Irish wage and business earners. This will create more jobs. The standard of living of Ireland, as a result of the increase in money spending, has increased. The Celtic Tiger went to a temporary sleep in 2002, & will wake a few years later, because the world economy has started to slow thereby catching up on Ireland’s economy. The political situation has helped the Irish economy to wake up (Celtic Tiger) this tiger economy was triggered when Ireland joined the European Union. This joining has increased the customer base of Ireland from only one (England) to more than twenty three European Union member countries. REFERENCES: McAleese, D., Report on Causes, Markets Created a Pot of Gold in Ireland by Benjamin Powell, The Economist Magazine Report 14th Oct 2004 Loughlin, J., How the EU influenced changes in Scotland, Wales and Northern Ireland, Europe factor, The Inroads, Summer 2004 by Loughlin, John Read More